China's Dagong Downgrades US Sovereign Credit
November 10 (Reuters)
The United States of America's local and foreign currency long-term sovereign credit rating was downgraded by the Dagong Global Credit Rating Co, Ltd on Tuesday to "A+" from "AA" to reflect what it called the country's deteriorating debt repayment capability and drastic decline of the government's intention of debt repayment. "The occurrence and development of the credit crisis in the United States resulted from the long-standing accumulation of contradictions in its economic system," Dagong said on its website.
The U.S. debt burden can be relieved only to a certain extent through large-scale printing and issuance of the U.S. dollar, it said, adding that, however, "the consequent decline of the U.S. dollar status and national credit will block the debt revenue channel vital to the existence of the United States to a greater extent."
The potential world crisis resulting from U.S. dollar depreciation will increase the uncertainty of the U.S. economic recovery, according to the agency.
"Under the circumstances that none of the economic factors influencing the U.S. economy has turned better explicitly it is possible that the U.S. will continue to expand the use of its loose monetary policy, damaging the interests of its creditors," Dagong said.
The ratings agency suggested the United States may face unpredictable risks in solvency in the coming one to two years and assigned a negative outlook on both local and foreign currency sovereign credit ratings of the United States.
According to their website, the Dagong Global Credit Rating Co Ltd is a specialized credit rating and risk analysis research institution founded in 1994 upon the joint approval of People's Bank of China and the former State Economic & Trade Commission, People's Republic of China.
Dagong is also a key credit information and credit solution service provider in China.
The United States of America's local and foreign currency long-term sovereign credit rating was downgraded by the Dagong Global Credit Rating Co, Ltd on Tuesday to "A+" from "AA" to reflect what it called the country's deteriorating debt repayment capability and drastic decline of the government's intention of debt repayment. "The occurrence and development of the credit crisis in the United States resulted from the long-standing accumulation of contradictions in its economic system," Dagong said on its website.
The U.S. debt burden can be relieved only to a certain extent through large-scale printing and issuance of the U.S. dollar, it said, adding that, however, "the consequent decline of the U.S. dollar status and national credit will block the debt revenue channel vital to the existence of the United States to a greater extent."
The potential world crisis resulting from U.S. dollar depreciation will increase the uncertainty of the U.S. economic recovery, according to the agency.
"Under the circumstances that none of the economic factors influencing the U.S. economy has turned better explicitly it is possible that the U.S. will continue to expand the use of its loose monetary policy, damaging the interests of its creditors," Dagong said.
The ratings agency suggested the United States may face unpredictable risks in solvency in the coming one to two years and assigned a negative outlook on both local and foreign currency sovereign credit ratings of the United States.
According to their website, the Dagong Global Credit Rating Co Ltd is a specialized credit rating and risk analysis research institution founded in 1994 upon the joint approval of People's Bank of China and the former State Economic & Trade Commission, People's Republic of China.
Dagong is also a key credit information and credit solution service provider in China.